But the appointment of Chief Operating Officer Dirk Meyer
to succeed Hector Ruiz as CEO did not resuscitate AMD shares,
which fell as much as 9 percent after the earnings report.

Ruiz, who is staying on as Chairman and has been grooming
Meyer as a successor for two years, said there was no question
that he was the best candidate for the job at AMD, which has
posted net losses for seven consecutive quarters.

"He's watched me do all the screw ups that I did and
understands much better the things that we need to do better,
which an outside candidate cannot," Ruiz said in a telephone
interview.

Meyer said he would focus on execution and reaching and
sustaining profitability in his new job. Ruiz plans to keep
working on AMD's asset-light manufacturing strategy and
promised to announce details by the year end. AMD plans to use
new partnerships to reduce manufacturing costs.

American Technology Research analyst Doug Freedman said
some investors may be disappointed AMD chose from within its
ranks, although he held out hope the move would foretell
improving fortunes for the company.

"I think they probably are making the switch because
they're seeing a light at the end of the tunnel. I think
they've identified this as the trough," Freedman said, noting
that AMD has new products that should soon help boost sales.

AMD has been losing market share to Intel and remains a
generation behind its larger rival in chip-making technology.

It is banking in part on its Barcelona server
microprocessor, now shipping in volume, to turn things around.
That chip had been delayed by a flaw.

The company posted a second-quarter net loss of $1.19
billion, or $1.96 per share, compared with a year-ago net loss
of $600 million, or $1.09.

Its quarterly loss included a $1.44 per share impairment
charge for the write-off of some of the value of its 2006
purchase of graphics chipmaker ATI Technologies.

Its operating loss would have been 60 cents a share,
excluding an unusual gain of 16 cents a share, compared with
the average Wall Street expectation for a loss of 52 cents a
share from analysts polled by Reuters Estimates.

Revenue rose to $1.35 billion from $1.31 billion a year ago
but was down seven percent from the first quarter.

Charter Equity Research analyst John Dryden said the bottom
and top line results were disappointing.

"Processors were weak. Graphics was in line. This led to
weak margins and a shortfall to overall per share figure," said
Dryden expected a gross profit margin of 41 percent compared
with the 37 percent AMD reported.

AMD's results come two days after Intel posted a 25 percent
gain in net profit as it extended gains in the notebook
personal computer market. Intel also gave a revenue forecast
for the current quarter that topped expectations.

"They're losing share to Intel and they haven't been able
to reverse the losses in spite of new products across server,
notebook and desktop," Dryden said.

AMD said that, while it was disappointed with its financial
results, it remained committed to posting an operating profit
for the second half of the year based on new products and
continued action aimed at reducing its break-even point.

AMD said expects third-quarter revenue to increase in line
with typical seasonal trends. It said the average seasonal
increase would be between 8 percent and 10 percent.

It would not say whether it would post a profit in the
third quarter, but said its break-even point for quarterly
revenue would be $1.5 billion.

The shares of Sunnyvale, California-based AMD fell as low
as $4.80 in late trading after closing up 24 cents at $5.30 on
the New York Stock Exchange.

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